BEDFORD, Mass., July 24, 2012-- iRobot Corp. (NASDAQ: IRBT), a leader in delivering robotic technology-based solutions, today announced its financial results for the second quarter ended June 30, 2012.
- Revenue for the second quarter of 2012 was $111.4 million, compared with $108.1 million for the same quarter one year ago. Revenue for the first half of 2012 was $209.3 million, compared with $214.4 million last year.
- Net income in the second quarter of 2012 was $7.4 million, compared with $8.0 million in the second quarter of 2011. For the first half, net income was $8.0 million, compared with $15.5 million a year ago.
- Quarterly earnings per share were $0.26, compared with $0.29 in the second quarter last year. First-half earnings per share were $0.28, compared with $0.56 in 2011.
- Adjusted EBITDA for the second quarter of 2012 was $16.2 million, compared with $16.3 million in the second quarter of 2011. For the first half, Adjusted EBITDA was $22.3 million, compared with $31.5 million a year ago.
“Our second-quarter performance was very good given the challenging environment. Strong growth in both our international and U.S. markets drove a 50% year-over-year increase in Home Robot revenue. Our steadily increasing Home Robot global reach is enabling us to substantially offset the continuing impact of U.S. government funding on our Defense & Security business and to remain on track to meet our revenue and increase our profit expectations for fiscal year 2012,” said Colin Angle, chairman and chief executive officer of iRobot.
Business Highlights
- Home Robot domestic revenues grew 40% year-over-year. The positive impact of our Q2 advertising campaign to reach our target customer, the modern professional, is evident in the second-quarter 2012 results. International revenues grew more than 55% in Q2 over last year. Total EMEA revenue grew 42% in the second quarter over last year and Western Europe, which comprised approximately 30% of Home Robot revenue, grew 40%. As a result, we have increased our full-year expectations for this business unit.
- Our Home Robot product return experience has improved as the result of our sustained investment in product quality. In the second quarter we adjusted our accrual rates for Home Robot product returns, resulting in a benefit to revenue and earnings. Revenue, EPS and Adjusted EBITDA for the company would have been $108.2 million, $0.18, and $12.8 million respectively, without the $3.3 million or $0.08 per share positive adjustment.
- We were awarded three new contracts totaling approximately $27 million for SUGV and PackBot robots, spares and software upgrades. U.S. government funding and program delays, however, continue to negatively impact our Defense & Security business unit. We have reflected that impact in our lower full-year expectations for this business unit.
- We announced, with InTouch Health, the unveiling of the RP-VITA™ telemedicine robot. The robot combines InTouch Health's state-of-the-art telemedicine solutions with iRobot's autonomous navigation capabilities, mobility, interactive communication and situational awareness from the Ava program.
Financial Expectations
Management provides the following expectations with respect to the third quarter ending September 29, 2012 and full year ending December 29, 2012.
|
Q3 2012: |
||||||||||
| Revenue | $125 - $130 million | |||||||||
| Earnings Per Share | $0.30 - $0.36 | |||||||||
| Adjusted EBITDA | $17 - $20 million | |||||||||
|
Fiscal Year 2012: |
Current |
Prior |
||||||||
| Revenue | $465 - $485 million | $465 - $485 million | ||||||||
| Earnings Per Share | $0.90 - $1.00 | $0.75 - $0.95 | ||||||||
| Adjusted EBITDA | $59 - $63 million | $56 - $63 million | ||||||||
|
Full-Year 2012 BU Revenue: |
Current |
Prior |
||||||||
| Home Robots | $365 - $375 million | $345 - $355 million | ||||||||
| Defense & Security Robots | $100 - $110 million | $120 - $130 million |
Second-Quarter Conference Call
iRobot will host a conference call tomorrow at 8:30 a.m. ET to discuss its results for the second fiscal quarter 2012, business outlook, and outlook for 2012 financial performance. Pertinent details include:
| Date: | Wednesday, July 25, 2012 | |||||||||||
| Time: | 8:30 a.m. ET | |||||||||||
| Call-In Number: | 847-413-3235 | |||||||||||
| Passcode: | 32828728 | |||||||||||
A live, audio broadcast of the conference call will also be available at http://investor.irobot.com/phoenix.zhtml?c=193096&p=irol-irhome. An archived version of the broadcast will be available on the same website shortly after the conclusion of the live event. A replay of the telephone conference call will be available through August 1, and can be accessed by dialing 630-652-3042, passcode 32828728#.
About iRobot Corp.
iRobot designs and builds robots that make a difference. The company's home robots help people find smarter ways to clean, and its defense & security robots protect those in harm's way. iRobot's consumer and military robots feature iRobot Aware® robot intelligence systems, proprietary technology incorporating advanced concepts in navigation, mobility, manipulation and artificial intelligence. For more information about iRobot, please visit www.irobot.com.
For iRobot Investors
Certain statements made in this press release that are not based on historical information are forward-looking statements which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. This press release contains express or implied forward-looking statements relating to, among other things, iRobot Corp.'s expectations regarding future financial performance and growth, demand for our robots, and operating performance, anticipated mix of revenue for the year ending December 29, 2012 and the third quarter ending September 29, 2012, anticipated revenue, earnings per share and Adjusted EBITDA for the year ending December 29, 2012 and the third quarter ending September 29, 2012, and anticipated business unit revenue for the year ending December 29, 2012. These statements are neither promises nor guarantees, but are subject to a variety of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those contemplated in these forward-looking statements. In particular, the risks and uncertainties include, among other things: our ability to operate in an emerging market, the financial strength of our customers and retailers, general economic conditions, our dependence on the U.S. federal government and government contracts, the timing of government contracts and orders, market acceptance of our products, changes in government policies or spending priorities, and competition. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. iRobot Corp. undertakes no obligation to update or revise the information contained in this press release, whether as a result of new information, future events or circumstances or otherwise. For additional disclosure regarding these and other risks faced by iRobot Corp., see the disclosure contained in our public filings with the Securities and Exchange Commission.
This release includes Adjusted EBITDA, a non-GAAP financial measure as defined by SEC Regulation G. We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, merger and acquisition expenses, net intellectual property litigation expenses, restructuring expenses, and non-cash stock compensation. A reconciliation between net income and Adjusted EBITDA are provided in the financial tables at the end of this press release.
| iRobot Corporation | ||||||||||||||||||
| Consolidated Statement of Income | ||||||||||||||||||
| (in thousands, except per share amounts) | ||||||||||||||||||
| (unaudited) | ||||||||||||||||||
| For the three months ended | For the six months ended | |||||||||||||||||
| June 30, | July 2, | June 30, | July 2, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||
| Revenue | ||||||||||||||||||
| Product revenue | $ | 107,760 | $ | 97,396 | $ | 199,502 | $ | 194,107 | ||||||||||
| Contract revenue | 3,685 | 10,686 | 9,750 | 20,252 | ||||||||||||||
| Total | 111,445 | 108,082 | 209,252 | 214,359 | ||||||||||||||
| Cost of Revenue | ||||||||||||||||||
| Product revenue | 58,795 | 57,835 | 117,070 | 114,025 | ||||||||||||||
| Contract revenue | 3,203 | 7,711 | 8,722 | 14,344 | ||||||||||||||
| Total | 61,998 | 65,546 | 125,792 | 128,369 | ||||||||||||||
| Gross Margin | 49,447 | 42,536 | 83,460 | 85,990 | ||||||||||||||
| Operating Expense | ||||||||||||||||||
| Research & development | 9,667 | 8,146 | 18,391 | 16,875 | ||||||||||||||
| Selling & marketing | 19,122 | 12,767 | 32,692 | 25,748 | ||||||||||||||
| General & administrative | 10,022 | 10,097 | 21,064 | 20,697 | ||||||||||||||
| Total | 38,811 | 31,010 | 72,147 | 63,320 | ||||||||||||||
| Operating income | 10,636 | 11,526 | 11,313 | 22,670 | ||||||||||||||
| Other income (expense), net | 60 | 112 | 280 | 350 | ||||||||||||||
| Pre-tax income | 10,696 | 11,638 | 11,593 | 23,020 | ||||||||||||||
| Income tax expense | 3,321 | 3,614 | 3,565 | 7,519 | ||||||||||||||
| Net income | $ | 7,375 | $ | 8,024 | $ | 8,028 | $ | 15,501 | ||||||||||
| Net income per common share: | ||||||||||||||||||
| Basic | $ | 0.27 | $ | 0.30 | $ | 0.29 | $ | 0.59 | ||||||||||
| Diluted | $ | 0.26 | $ | 0.29 | $ | 0.28 | $ | 0.56 | ||||||||||
| Shares used in per common share calculations: | ||||||||||||||||||
| Basic | 27,522 | 26,667 | 27,441 | 26,388 | ||||||||||||||
| Diluted | 28,182 | 27,911 | 28,259 | 27,733 | ||||||||||||||
| Stock-based compensation included in above figures: | ||||||||||||||||||
| Cost of product revenue | $ | 296 | $ | 320 | $ | 586 | $ | 571 | ||||||||||
| Cost of contract revenue | 73 | 156 | 191 | 250 | ||||||||||||||
| Research & development | 295 | 239 | 554 | 320 | ||||||||||||||
| Selling & marketing | 179 | 158 | 416 | 339 | ||||||||||||||
| General & administrative | 2,059 | 1,538 | 3,668 | 2,710 | ||||||||||||||
| Total | $ | 2,902 | $ | 2,411 | $ | 5,415 | $ | 4,190 | ||||||||||
| iRobot Corporation | ||||||||||
| Condensed Consolidated Balance Sheet | ||||||||||
| (unaudited, in thousands) | ||||||||||
| June 30, | December 31, | |||||||||
| 2012 | 2011 | |||||||||
| Assets | ||||||||||
| Cash and equivalents | $ | 156,543 | $ | 166,308 | ||||||
| Short term investments | 20,181 | 17,811 | ||||||||
| Accounts receivable, net | 39,527 | 43,338 | ||||||||
| Unbilled revenues | 2,073 | 2,362 | ||||||||
| Inventory | 34,597 | 31,089 | ||||||||
| Deferred tax assets | 15,494 | 15,344 | ||||||||
| Other current assets | 8,270 | 7,928 | ||||||||
| Total current assets | 276,685 | 284,180 | ||||||||
| Property, plant and equipment, net | 26,940 | 29,029 | ||||||||
| Deferred tax assets | 11,086 | 6,127 | ||||||||
| Other assets | 18,692 | 12,877 | ||||||||
| Total assets | $ | 333,403 | $ | 332,213 | ||||||
| Liabilities and stockholders' equity | ||||||||||
| Accounts payable | $ | 45,212 | $ | 48,406 | ||||||
| Accrued expenses | 13,878 | 17,188 | ||||||||
| Accrued compensation | 9,738 | 17,879 | ||||||||
| Deferred revenue and customer advances | 1,882 | 1,527 | ||||||||
| Total current liabilities | 70,710 | 85,000 | ||||||||
| Long term liabilities | 4,069 | 4,255 | ||||||||
| Stockholders' equity | 258,624 | 242,958 | ||||||||
| Total liabilities and stockholders' equity | $ | 333,403 | $ | 332,213 | ||||||
| iRobot Corporation | ||||||||||||||||||||||
| Consolidated Statement of Cash Flows | ||||||||||||||||||||||
| (unaudited, in thousands) | ||||||||||||||||||||||
| For the three months ended | For the six months ended | |||||||||||||||||||||
| June 30, | July 2, | June 30, | July 2, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||||
| Net income | $ | 7,375 | $ | 8,024 | $ | 8,028 | $ | 15,501 | ||||||||||||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||||||||||||
| Depreciation and amortization | 2,711 | 2,457 | 5,313 | 4,640 | ||||||||||||||||||
| Loss on disposal of property and equipment | 97 | 3 | 166 | 473 | ||||||||||||||||||
| Stock-based compensation | 2,902 | 2,411 | 5,415 | 4,190 | ||||||||||||||||||
| Deferred income taxes, net | 2,464 | 2,046 | (4,230 | ) | 4,488 | |||||||||||||||||
| Tax benefit of excess stock based compensation deductions | (330 | ) | (3,213 | ) | (1,035 | ) | (5,655 | ) | ||||||||||||||
| Non-cash director deferred compensation | 20 | 44 | 42 | 82 | ||||||||||||||||||
| Changes in operating assets and liabilities — (use) source | ||||||||||||||||||||||
| Accounts receivable | (9,620 | ) | (6,920 | ) | 3,811 | (473 | ) | |||||||||||||||
| Unbilled revenue | (833 | ) | (100 | ) | 289 | (4,022 | ) | |||||||||||||||
| Inventory | (2,916 | ) | 869 | (3,508 | ) | (7,042 | ) | |||||||||||||||
| Other assets | (3,210 | ) | (2,880 | ) | (378 | ) | (4,809 | ) | ||||||||||||||
| Accounts payable | 910 | (10,971 | ) | (3,194 | ) | (5,416 | ) | |||||||||||||||
| Accrued expenses | (5,255 | ) | (974 | ) | (3,252 | ) | (1,889 | ) | ||||||||||||||
| Accrued compensation | 2,008 | 4,945 | (8,141 | ) | (4,733 | ) | ||||||||||||||||
| Deferred revenue | (540 | ) | (1,608 | ) | 355 | (1,494 | ) | |||||||||||||||
| Change in long term liabilities | (120 | ) | (123 | ) | (186 | ) | 266 | |||||||||||||||
| Net cash used in operating activities | (4,337 | ) | (5,990 | ) | (505 | ) | (5,893 | ) | ||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||||
| Purchase of property and equipment | (1,313 | ) | (2,654 | ) | (2,956 | ) | (7,208 | ) | ||||||||||||||
| Change in other assets | - | - | (6,000 | ) | - | |||||||||||||||||
| Purchases of investments | (5,086 | ) | - | (5,086 | ) | (5,000 | ) | |||||||||||||||
| Sales of investments | - | 2,500 | 2,500 | 5,000 | ||||||||||||||||||
| Net cash used in investing activities | (6,399 | ) | (154 | ) | (11,542 | ) | (7,208 | ) | ||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||||
| Proceeds from stock option exercises | 699 | 4,013 | 2,022 | 8,597 | ||||||||||||||||||
| Income tax withholding payment associated with restricted stock vesting | (548 | ) | (356 | ) | (775 | ) | (809 | ) | ||||||||||||||
| Tax benefit of excess stock based compensation deductions | 330 | 3,213 | 1,035 | 5,655 | ||||||||||||||||||
| Net cash provided by financing activities | 481 | 6,870 | 2,282 | 13,443 | ||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | (10,255 | ) | 726 | (9,765 | ) | 342 | ||||||||||||||||
| Cash and cash equivalents, at beginning of period | 166,798 | 107,999 | 166,308 | 108,383 | ||||||||||||||||||
| Cash and cash equivalents, at end of period | $ | 156,543 | $ | 108,725 | $ | 156,543 | $ | 108,725 | ||||||||||||||
| iRobot Corporation | ||||||||||||||||||||||
| Supplemental Information | ||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||
| For the three months ended | For the six months ended | |||||||||||||||||||||
| June 30, | July 2, | June 30, | July 2, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
| Revenue: * | ||||||||||||||||||||||
| Home Robots | $ | 96,013 | $ | 63,892 | $ | 177,596 | $ | 131,774 | ||||||||||||||
| Domestic | $ | 31,181 | $ | 22,395 | $ | 52,996 | $ | 40,453 | ||||||||||||||
| International | $ | 64,832 | $ | 41,497 | $ | 124,600 | $ | 91,321 | ||||||||||||||
| Defense & Security | $ | 15,432 | $ | 44,190 | $ | 31,656 | $ | 82,585 | ||||||||||||||
| Domestic | $ | 13,222 | $ | 43,378 | $ | 25,399 | $ | 73,580 | ||||||||||||||
| International | $ | 2,210 | $ | 812 | $ | 6,257 | $ | 9,005 | ||||||||||||||
| Product | $ | 11,747 | $ | 33,504 | $ | 21,906 | $ | 62,333 | ||||||||||||||
| Contract | $ | 3,685 | $ | 10,686 | $ | 9,750 | $ | 20,252 | ||||||||||||||
| Product Life Cycle | $ | 4,872 | $ | 6,617 | $ | 9,762 | $ | 19,320 | ||||||||||||||
| Gross Margin Percent: | ||||||||||||||||||||||
| Home Robots | 51.7 | % | 44.1 | % | 48.8 | % | 44.8 | % | ||||||||||||||
| Defense & Security | -1.5 | % | 32.5 | % | -10.0 | % | 32.6 | % | ||||||||||||||
| Total Company | 44.4 | % | 39.4 | % | 39.9 | % | 40.1 | % | ||||||||||||||
| Units shipped: | ||||||||||||||||||||||
| Home Robots * | 426 | 328 | 818 | 677 | ||||||||||||||||||
| Defense & Security | 49 | 192 | 187 | 306 | ||||||||||||||||||
| Average gross selling prices for robot units: | ||||||||||||||||||||||
| Home Robots | $ | 225 | $ | 195 | $ | 220 | $ | 194 | ||||||||||||||
| Defense & Security * | $ | 140 | $ | 140 | $ | 65 | $ | 141 | ||||||||||||||
| Defense & Security Funded Product Backlog * | $ | 18,300 | $ | 15,118 | $ | 18,300 | $ | 15,118 | ||||||||||||||
| Days sales outstanding | 34 | 36 | 34 | 36 | ||||||||||||||||||
| Days in inventory | 54 | 54 | 54 | 54 | ||||||||||||||||||
| Headcount | 604 | 687 | 604 | 687 | ||||||||||||||||||
| * in thousands | ||||||||||||||||||||||
| iRobot Corporation | ||||||||||||||||||||||
| Adjusted EBITDA Reconciliation to GAAP | ||||||||||||||||||||||
| (unaudited, in thousands) | ||||||||||||||||||||||
| For the three months ended | For the six months ended | |||||||||||||||||||||
| June 30, | July 2, | June 30, | July 2, | |||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||
| Net income | $ | 7,375 | $ | 8,024 | $ | 8,028 | $ | 15,501 | ||||||||||||||
| Interest income, net | (264 | ) | (331 | ) | (526 | ) | (541 | ) | ||||||||||||||
| Income tax expense | 3,321 | 3,614 | 3,565 | 7,519 | ||||||||||||||||||
| Depreciation | 2,485 | 2,169 | 4,879 | 4,227 | ||||||||||||||||||
| Amortization | 226 | 288 | 434 | 413 | ||||||||||||||||||
| EBITDA | 13,143 | 13,764 | 16,380 | 27,119 | ||||||||||||||||||
| Stock-based compensation expense | 2,902 | 2,411 | 5,415 | 4,190 | ||||||||||||||||||
| Merger and acquisition expense | 14 | - | 26 | - | ||||||||||||||||||
| Net intellectual property litigation expense | 34 | 88 | 71 | 182 | ||||||||||||||||||
| Restructuring expense | 129 | - | 407 | - | ||||||||||||||||||
| Adjusted EBITDA | $ | 16,222 | $ | 16,263 | $ | 22,299 | $ | 31,491 | ||||||||||||||
| Use of Non-GAAP Financial Measures | ||||||||||||||||||||||
| In evaluating its business, iRobot considers and uses Adjusted EBITDA as a supplemental measure of its operating performance. The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, merger and acquisition expenses, net intellectual property litigation expenses, restructuring expenses and non-cash stock compensation. The Company also presents Adjusted EBITDA because it believes it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance. | ||||||||||||||||||||||
| The term Adjusted EBITDA is not defined under U.S. generally accepted accounting principles, or U.S. GAAP, and is not a measure of operating income, operating performance or liquidity presented in accordance with U.S. GAAP. Adjusted EBITDA has limitations as an analytical tool, and when assessing the Company's operating performance, investors should not consider Adjusted EBITDA in isolation, or as a substitute for net income (loss) or other consolidated income statement data prepared in accordance with U.S. GAAP. Among other things, Adjusted EBITDA does not reflect the Company's actual cash expenditures. Other companies may calculate similar measures differently than iRobot, limiting their usefulness as comparative tools. iRobot compensates for these limitations by relying primarily on its GAAP results and using Adjusted EBITDA only supplementally. | ||||||||||||||||||||||
Contact:
| Elise Caffrey Investor Relations iRobot Corp. (781) 430-3003 ecaffrey@irobot.com |
Matt Lloyd Media Relations iRobot Corp. (781) 430-3720 mlloyd@irobot.com |
